TikTok Pours In Billions Of Dollars To Dominate South East Asian Market

The short-form video streaming giant TikTok, owned by China’s ByteDance, is racing to dominate the Southeast Asian market.

Photo Insert: In June, TikTok Chief Executive Shou Zi Chew said the company planned to invest “billions of dollars” in Southeast Asia, with Indonesia playing a critical part in the strategy.

Under tough regulatory scrutiny in the US — its biggest market with 116 million users — TikTok is increasingly investing in its second biggest market: Indonesia, which had 113 million app users as of April, according to Statista.

Outside Indonesia, it’s ramping up its focus on Thailand and Malaysia, too, Elizabeth Beattie reported for Bloomberg.

In June, TikTok Chief Executive Shou Zi Chew said the company planned to invest “billions of dollars” in Southeast Asia, with Indonesia playing a critical part in the strategy.

“We see our growth opportunity here to be very immense, and we look forward to investing more in this country, and of course in the region,” Chew said, noting that the company had close to 2,000 employees in Indonesia.

Current job advertisements for the company include hundreds of roles related to e-commerce based across the Southeast Asia region.

With increased internet accessibility, online marketplaces have grown across Southeast Asia, with the current penetration rate (excluding food and beverage) being 20% — in contrast to China’s 47% — according to McKinsey, which projects the market will grow to reach $230 billion (¥32.5 trillion) in gross merchandise volume by 2026, Japan Times also reported.

TikTok’s regional competitors include Lazada and Shoppee, which emerged to fill an Amazon-sized gap in the market.

Lazada has livestreaming capabilities through its LazLive offering and has sought to position itself as “shoppertainment” in recent years, while mobile-centric Shopee has branched into food delivery.

TikTok’s regional charm offensive could not come at a worse time for these competitors, said Simon Torring, co-founder of Cube Asia, an e-commerce research platform focused on Southeast Asia, with Shopee and Alibaba’s Lazada facing pressure to deliver revenue targets and cut costs.

In January, Chinese e-commerce company JD.com confirmed that it was shutting its services in Indonesia and Thailand after it struggled to gain a foothold in the market.

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